Is it reasonable for a UK UCITS to insist US investment managers to invest in accordance with COLL?

Do you often get resistance from US investment managers when asking them to comply with UK regulations when they are being appointed to manage a UK UCITS scheme? Here is a short Q&A which will help you understand why.

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US investment managers tend to push back on this and ask for the requirements to be advised to them. Much like a UK investment manager would ask a German KAG or Dutch Pension fund, for example, or even an unusual UK client which the investment manager wasn’t used to dealing with, to advise it of their requirements.

The reason is that any investment manager will usually only have a locally qualified compliance team (subject to it having global operations). In all circumstances the client needs to advise the investment manager of their specific requirements so the compliance team can code it into their pre and post trade compliance systems. However, you may want to ask if the US investment manager has other UCITS clients? If the do they should be familiar with the requirements so you might be able to ask for it. However if they don’t, the UK ACD/investment manager’s compliance team should be able to provide the relevant list for the specific fund, as they would do this day in and day out, and in any event they would ultimately be responsible for compliance of the UK fund.

Should you require any further advice or information on the above, Cleveland & Co, your external in-house counsel, are here to help.

 

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